The market rally over the last two weeks has made Thanksgiving especially happy for investors.
However, the excitement may not last. The market breadth is shrinking and stocks with gains over the last couple of weeks are starting to show signs of stress. We may be nearing a much needed bout of profit taking. Analysts believe it could be 2% to 3% to as much as 5% when it finally appears.
The Russell 2000 has completed a streak of 14 consecutive daily gains. That has not happened since 1996. That is a 16% gain in 14 days. There will be profit taking, it is only a matter of time.
The volume over the next two days is going to be very low and the markets are typically bullish. However, the gains may be small and could be followed by significant profit taking next week.
There are new terror warnings out for holiday travel and while I doubt anything will happen there is no reason to jump in front of that potential event risk.
There is no reason to try and attempt new plays until next week. I suggest we enjoy the Thanksgiving weekend and I will produce a full newsletter this weekend after we see what happens to the market over the next two trading days.
Send Jim an email